from the industries-still-writing-the-rules dept

The European Union has its own revolving door, one that allows lobbyists to enter government agencies in order to directly regulate the same industries they so recently stumped for. Maria Martin-Prat went from directing "global legal policy" for IFPI (the international RIAA) to being the EU Commission's point person for copyright issues.

Speaking at a Westminster Forum seminar, Maria Martin-Prat, EC Head of the Copyright Unit for the Internal Market Directorate General (DG MARKT), said the Commission should look at whether contracts were fair.

She told us that the infinite assignment of rights that authors must agree to in most EU countries to get their work published was what she had in mind.

In the digital era, freelance authors and photographers in many members states have been asked to assign their rights to an intermediary in “infinite” deals.

Forever contracts are, indeed, the sort of unfair deal that the EU Commission should take a longer look at. Here in the US, the reversion of copyright back to the creators (for pre-1976 recordings) has prompted record labels to argue that everything created was a "work for hire," and thus belongs to the label in perpetuity. (This argument also took the form of a midnight run to Congress to get copyright law amended in the recording industry's favor.) An infinite contract obviously closes that potential loophole for artists to reclaim their work after a reasonable amount of time.

Seems like a good start, but Martin-Prat continues, dispelling any notion that serious copyright reform will occur under her guidance.

The distribution of “the share of the value in the internet” was worth examining said Martin-Prat - particularly “who gets the profits?”

Ah, the old "the Internet owes everyone a living" argument, wherein (probably) Google is blamed for every low number on the copyright industries' balance sheets and asked to kick in to make up for the shortfall. Note that Martin-Prat asks "who gets the profits," rather than asking how to divide the profits, which indicates she already has an answer in mind. Why address problems in any logical fashion when you can just use the weight of the EU Commission to make internet services bend to the will of misguided court decisions and nearly two decades' of useless complaining from the recording industry?

Then Martin-Prat steps even further away from copyright moderation and takes a swing at the few remaining rights purchasers of creative works have, citing specifically the UsedSoft decision, which agreed that sold software was a "license" rather than a sale, but despite this distinction, could still be resold.

“In both cases the Court was pushing the boundaries of the copyright rules to help the function of the internal market,” she said. “UsedSoft was desperately trying to turn software licensed by a user into a good - so they could enjoy free movement of goods,” she observed. “The Court cut a few corners” in its interpretation, she thought. However, “if we don’t do something at some point the CJEU will keep pushing.”

So, it looks as though Martin-Prat will be pushing back on this decision in order to remove something that actually helps sell new software -- the possibility of resale. Whether the copyright industries like it or not, people consider this factor when purchasing new items and if the possibility exists to make something back, it actually encourages a few more sales. There's nothing inherently "unfair" about not being able to profit from every sale, but the industries still think it's just another way they're being screwed -- hence the push to call everything a "license," even if it's a physical good.

Martin-Prat offers to take on an inherently unfair contract (the infinite copyright contract) but only because she has a desire to protect other unfair contracts (you can't resell what your purchase). The first will likely end up riddled with loopholes (for all intents and purposes, most recording contracts may as well be "infinite," considering how hard it is for artists to reclaim their copyrights) and the latter will just help the industries further pare down the few copyright law exceptions that currently exist.

from the good-for-them dept

You may remember that a couple years ago, an appeals court in the US ruled that, when dealing with software, as long as the provider calls what it sells "a license" rather than a "sale" it can take away your first sale rights. As you hopefully know, first sale rights are what let you resell goods that have copyright-covered material in them -- such as books -- without asking for permission from the copyright holder. However, for reasons that still don't make any sense, the 9th Circuit seems to think that as long as something is purely digital, first sale no longer applies.

The Supreme Court refused to hear the appeal, so while technically the ruling still only applies in the 9th Circuit, it's what most consider to be the state of the law in the US (there is always the possibility a different circuit court could disagree and it could go back to the Supreme Court -- and one could argue that some other rulings in the 9th Circuit already conflict -- but for now, the Autodesk case is widely considered the standard). There is, also, the upcoming ReDigi case, of which there's a decent profile in the Boston Globe -- but that's focused on music, and it's not entirely clear how that one will come out either.

Over in Europe, however, it appears that the European Court of Justice (who has been pushing out some relatively insightful rulings on copyright issues lately) seems to recognize just how ridiculous the 9th Circuit's view on first sale and software really is. In a new ruling, it has upheld the right of first sale on software, basically saying that you are buying a license and that license is resellable.

The specific case involved a company, UsedSoft, that was trying to create a market in reselling used software. Oracle sued, claiming that its license agreement specifically stated that it could not be resold. However, the court found that the right of first sale applied. In the court's language, it talks about copyright "exhaustion" which is the idea that once you've sold something you've "exhausted" your right to control it.

It makes no difference, in a situation such as that at issue in the main proceedings, whether the copy of the computer program was made available to the customer by the rightholder concerned by means of a download from the rightholder’s website or by means of a material medium such as a CD-ROM or DVD. Even if, in the latter case too, the rightholder formally separates the customer’s right to use the copy of the program supplied from the operation of transferring the copy of the program to the customer on a material medium, the operation of downloading from that medium a copy of the computer program and that of concluding a licence agreement remain inseparable from the point of view of the acquirer, for the reasons set out in paragraph 44 above. Since an acquirer who downloads a copy of the program concerned by means of a material medium such as a CD-ROM or DVD and concludes a licence agreement for that copy receives the right to use the copy for an unlimited period in return for payment of a fee, it must be considered that those two operations likewise involve, in the case of the making available of a copy of the computer program concerned by means of a material medium such as a CD-ROM or DVD, the transfer of the right of ownership of that copy.

There are some interesting side notes on this. First, the court also rules that if Oracle promised free maintenance updates to the original licensee, it must continue to provide those to whomever purchased the "used" software. However, it also puts a couple of limitations on this. The first one is somewhat obvious: the seller of the used license can no longer be using the software. Oracle argued that this would be hard to track, but the court rightly points out that this is the same issue that those who sell software on CD-ROMs and DVDs face, but they figure out how to survive:

As Oracle rightly observes, ascertaining whether such a copy has been made unusable may prove difficult. However, a copyright holder who distributes copies of a computer program on a material medium such as a CD-ROM or DVD is faced with the same problem, since it is only with great difficulty that he can make sure that the original acquirer has not made copies of the program which he will continue to use after selling his material medium. To solve that problem, it is permissible for the distributor – whether ‘classic’ or ‘digital’ – to make use of technical protective measures such as product keys.

Separately, however, the court ruled that you cannot divvy up the number of seats in a license and sell them individually. That is, if you buy a 100 seat license to some software, and are only using 50, you can't then sell just those other 50 seats. This ruling says that the first sale only applies to the entire license agreement, basically.

There is some disagreement as to how "big" an impact this ruling will have. To be honest, I'm not convinced that the overall impact will be that large, but I think it is a good thing that the court appears to recognize that you cannot contract away certain rights granted to you under copyright. Copyright holders have long tried to remove the limitations and exceptions of copyright law through contracts and "licenses." Recognizing that those limitations and exceptions really do exist is important, and it's good to see the EU Court of Justice release a clear ruling on that issue.